AINS 22 - CHAPTER 3
An example of an uninsured motor vehicle under the Personal Auto Policy (PAP) is
An example of an uninsured motor vehicle under the Personal Auto Policy (PAP) is
The Agreement and Definitions page of the Personal Auto Policy (PAP) includes
general agreement stating that the insurer is providing the coverage subject to payment of premium and to the terms of the policy.
An insured under a personal auto policy with liability limits of $100,000/$300,000/$25,000 is responsible for an auto accident that resulted in $90,000 in damages for bodily injury. The costs incurred by the insurer to defend the insured were $20,000. Which one of the following amounts did the insurer pay as a result of the accident?
$110,000
Jared had a Personal Auto Policy (PAP) with a single limit of $100,000 for bodily injury and property damage liability. He was found to be at fault for an accident by a court and a $95,000 judgment was entered against him. In addition, prejudgment interest of $10,000 was awarded. Since entry of judgment, $1,000 in postjudgment interest has accrued. Jared earns $150 a day in salary and missed five days of work to attend the trial. His insurer spent $25,000 defending the lawsuit against Jared. Which one of the following is the total that should be paid by Jared's insurer under his PAP?
$126,750
Larry and his friend John were driving in Larry's sports utility vehicle. A vehicle ran a red light at an intersection and struck them. Larry's vehicle was at a complete stop. The driver of the other vehicle was intoxicated, and clearly at fault in the accident. The drunken driver's automobile insurance had canceled for nonpayment when the accident occurred. Larry and John were taken to the hospital. They incurred the following losses as result of the accident: Larry: $20,000 in medical bills $4,000 in lost wages $20,000 in pain and suffering John: $10,000 in medical bills $2,000 in lost wages $20,000 in pain and suffering Larry has liability limits of $100/$300/$50 and a $100,000 uninsured motorists coverage limit on his Personal Auto Policy (PAP) covering his sports utility vehicle. Which one of the following amounts will Larry's insurer pay as a result of this accident?
A. $24,000 B. $36,000 C. $44,000 D. $76,000.
Which one of the following statements is true regarding public or livery conveyances and the liability coverage provided under the Personal Auto Policy (PAP)?
A. Liability insurance applies to an insured's ownership or operation of the vehicle while it is being used as a public or livery conveyance B. The public or livery conveyance exclusion applies to share-the-expense car pools C. The public or livery conveyance exclusion eliminates coverage for ordinary business use of a car D. The public or livery conveyance exclusion applies when a conveyance is indiscriminately offered to the public.
The medical payments coverage in the Personal Auto Policy (PAP) applies to
Any person occupying a covered auto
Bo was injured in an auto accident while using his car as a taxicab. Bo's car is covered by a Personal Auto Policy (PAP) that included medical payments coverage. Which one of the following statements about Bo's coverage for the accident is correct?
Bo will not receive medical payments under the PAP because of the Public or Livery Conveyance exclusion.
An uninsured motor vehicle under the Personal Auto Policy (PAP) can mean a land motor vehicle or trailer of any type that meets which one of the following criteria?
Bodily injury liability limit is less than the financial responsibility law.
Which one of the following is an exclusion to part A of the Personal Auto Policy (PAP)?
Bodily injury to an insured's employee
Under the uninsured motorists (UM) coverage in the Personal Auto Policy (PAP), the insurer agrees to pay damages that the insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle. These damages are best identified as which one of the following?
Compensatory damages
For liability, medical payments, and uninsured motorists under the Personal Auto Policy (PAP), a replacement auto is
Covered for the remainder of the policy period, even if the insured does not ask for coverage.
Under the liability coverage in the Personal Auto Policy (PAP), the insurer agrees to pay
Defense costs incurred by the insurer
Larry drove his car and was involved in a two-car accident caused by the other driver, who was uninsured. The at-fault driver offered Larry a substantial amount of money in satisfaction of his damages. Larry accepted the money in settlement of his losses and released the other driver from further liability. Larry later submitted an uninsured motorists claim under his Personal Auto Policy (PAP). The uninsured motorists claim would be
Denied because coverage under these circumstances is excluded.
The Part B—Medical Payments Coverage of the Personal Auto Policy (PAP) contains an Other Insurance provision. If two automobile policies from different insurers cover the same owned vehicle,
Each insurer pays its pro rata share
An insured covers his owned auto with more than one Personal Auto Policy (PAP), each from a different insurer. In the event of a claim for medical payments coverage,
Each insurer pays its pro rata share based on the proportion that its limit of liability bears to the total of applicable limits.
Regarding the Personal Auto Policy (PAP), which one of the following includes details on coverage related to state-specific laws and regulations?
Endorsements
The application of two or more underinsured motorists (UIM) coverage limits to a single auto accident because two or more separate policies apply is called
Interpolicy stacking
A temporary substitute auto under the Personal Auto Policy (PAP)
Is treated the same as other non-owned autos for physical damage coverage
Jean lent her van to a church member, Lindsey, who was transporting a group of teenagers to a church sponsored picnic. While on the way to the picnic, the van overturned, injuring one of the teenagers. The parent of the injured teenager has sued Jean, Lindsey, and the church for the teenager's injuries and future disability. Who is insured for liability under the Jean's Personal Auto Policy (PAP) for this accident?
Jean, Lindsey, and the church
Sandra, whose car is covered by a Personal Auto Policy (PAP), was injured in an accident along with her neighbors who were riding as guests in her car. Tragically, the neighbors' daughter was killed in the accident. All of the following are categories of expenses resulting from the accident that would generally be paid under Sandra's medical payments coverage, EXCEPT:
Medical services rendered within five years of the accident
Which one of the following best identifies an insured under Part C—Uninsured Motorists Coverage of the Personal Auto Policy (PAP)?
Members of the named insured's family who as pedestrians are injured by an uninsured motorist
A person, corporation, partnership, or other entity identified as an insured party in a Personal Auto Policy (PAP) Declarations page is known as the
Named insured
Jon is an owner of a car insured with a Personal Auto Policy (PAP) that includes medical payments coverage. A friend loaned his motorcycle to Jon for a weekend ride. Jon was injured while riding the motorcycle when it collided with a truck. Will Jon's PAP cover any of his medical bills?
No, Jon is not eligible for medical payments coverage under the PAP because he was injured while occupying a motorcycle.
Helen was staying at the vacation house of her friend, Grace. One night, Helen decided to go out for snacks. She wanted to borrow Grace's car, but Grace was asleep. Grace had told Helen earlier not to use the car without first obtaining Grace's permission, but Helen figured that the car was not being used anyway, so she should be able to use it. She found Grace's keys and drove the car to a convenience store. Along the way, she caused an accident and a liability claim was made against her. Is there coverage for this claim under Grace's Personal Auto Policy
No, because Helen's sense of entitlement was not reasonable.
Ella Fitzpatrick is retired and living in an adult retirement community. She has a 15-year-old sedan that she keeps for family outings when her children and grandchildren visit. Because she rarely uses the vehicle, and she tries to reduce expenses, Ella has a personal automobile policy with the following low coverage limits which satisfy the minimum requirements of her state: Part A—Liability Coverage $20,000/$40,000/$10,000 limits Part B—Medical Payments Coverage $1,000 per person Part C—Uninsured Motorists Coverage $20,000 combined single limit While on a family outing to a local beach in her state, Ella allowed her grandson, George, to drive her car. George was at fault when he failed to yield to a compact car at an intersection and collided. He injured the driver and passenger of the compact car, causing $15,000 in bodily injuries. The compact car, which has a value of $10,000 was totaled. Ella and George were injured. Ella had medical bills totaling $3,000. George had medical bills totaling $8,000. Assume that the driver of the compact car had $25,000 in damages, and he was able to collect $20,000 for those damages from Ella's policy. What amount, if anything, would the driver of the compact car be able to collect from the uninsured motorist coverage provided by his own personal automobile policy?
Nothing
The Definitions section of the Personal Auto Policy (PAP) defines several words and phrases. Which one of the following words is used in connection with Part B—Medical Payments Coverage and Part C—Uninsured Motorists Coverage, clarifying the coverages provided?
Occupying
Within the Personal Auto Policy (PAP), the name of a lender, loss payee, or lien holder is usually shown
On the Declarations page
Which one of the following sections of the Personal Auto Policy (PAP) would provide coverage for medical costs and loss of wages when the insured is injured by a hit-and-run driver?
Part C—Uninsured Motorists Coverage
The timeframe, beginning with the inception date, during which insurance coverage applies, is known as the
Policy period.
Marti fell asleep on a towel while sunbathing on the beach. A driver of a motorized all-terrain vehicle designed for off-road use ran over her, severely injuring her. No liability insurance coverage pertained to the accident. Marti made an uninsured motorist (UM) coverage claim under her Personal Auto Policy (PAP). Marti's claim
Should be denied because it involves no uninsured motor vehicle as defined by the PAP.
The definitions section of the Personal Auto Policy (PAP) uses
Simple-to-understand language to define important words and phrases that are used throughout the policy
Ian has a Personal Auto Policy (PAP) to cover his owned vehicle. Ian works for a bakery and drives his employer's van on weekdays making deliveries. The bakery has a workers compensation policy covering all of its employees, but has let the commercial auto insurance covering the delivery van expire. Ian is injured in an accident while driving the van making a delivery and sustains medical bills of $1,000. Ian's injury is the type for which workers compensation benefits are required. Ian's medical bills will be paid by
The bakery's workers compensation insurer.
The garage location shown on the Declarations page of a Personal Auto Policy (PAP) is
The location where the auto is principally parked overnight.
Some states' underinsured motorists (UIM) coverage endorsements contain a "damages trigger." In states that apply the UIM damages trigger, UIM coverage applies when
The negligent driver carries liability insurance limits that are lower than the injured party's actual damages.
Some states' underinsured motorists (UIM) coverage endorsements contain a "limits trigger." In states that apply the UIM limits trigger, UIM coverage applies when
The negligent driver carries liability limits below the limits provided by the UIM coverage of the injured party.
In states that apply the damages trigger in underinsured motorists (UIM) coverage situations, the UIM endorsement applies
When the negligent driver carries liability limits that are lower than the injured party's actual damages.
A retail chain sometimes requires its clerks to use their own cars to transfer special order merchandise from one store to another. Tamika, one of its employees, was moving items from one location to another in her station wagon which is insured with a Personal Auto Policy (PAP). Tamika was injured in an auto accident along the way, and her medical bills can be paid by her employer's workers compensation insurance. Her medical payments coverage under her PAP
Will pay nothing
Joe and Kitty Clements have a Personal Auto Policy (PAP). Their granddaughter, Katherine, lives with them. Does Katherine qualify as a "family member"?
Yes, as long as Katherine is a resident of the household
Sixteen-year-old Helen and her family were staying at a motel while on vacation. One night, Helen decided that she wanted to go out for snacks. She wished to borrow her parents' car, but her parents had gone to bed early. Helen was not sure whether her parents would mind her using their car, but she figured that the car was not being used anyway, so she should be able to use it. She found the keys and drove the car to a convenience store. Along the way, she caused an accident and a liability claim was made against her. Is there coverage for this claim under her parents' Personal Auto Policy (PAP)?
Yes, because for insurance purposes, it is assumed that a family member has permission to use another family member's car.